Scope

Alphavantage provides a company overview API that returns a set of basic features for companies. Information on the API is provided in the link below. The scope of the below analysis is to inspect various features of S&P 500 companies so I can better integrate this information into my equity trends dashboard, which ultimately will inform future investments. Note that the API was called in a seperate batch job. Each API response was concatenated into a single Pandas DataFrame.

Based on this analysis - there are a few items I intend to explore further:

API documentation:

https://www.alphavantage.co/documentation/

Pearsons Correaltion

Likely not accurate due to outliers or non-linear relationships, but something interesting may show up.

Spearman's Rank Correlation

Mitgate the effects of outliers and skewed distributions from pearsons correlation used above.

Interesting correlations from both the Pearson and Spearman's correlation method are noted below:

Book Value to EPS

Book Value

"Book value is equal to the cost of carrying an asset on a company's balance sheet, and firms calculate it netting the asset against its accumulated depreciation. As a result, book value can also be thought of as the net asset value (NAV) of a company, calculated as its total assets minus intangible assets (patents, goodwill) and liabilities. For the initial outlay of an investment, book value may be net or gross of expenses such as trading costs, sales taxes, service charges, and so on."

"As the accounting value of a firm, book value has two main uses:

1) It serves as the total value of the company's assets that shareholders would theoretically receive if a company was liquidated.

2) When compared to the company's market value, book value can indicate whether a stock is under- or overpriced."

Quoted from https://www.investopedia.com/terms/b/bookvalue.asp

From the charts below, it appears that outliers were the main contributors to a positive correlation, which makes sense that spearmans didn't catch the correlation. This could something to watch - identify companies with outlier book values.

(EV to EBITDA) to PE Ratio

The EV/EBITDA Multiple

"The EV/EBITDA ratio is a popular metric used as a valuation tool to compare the value of a company, debt included, to the company’s cash earnings less non-cash expenses. It's ideal for analysts and investors looking to compare companies within the same industry.

The enterprise-value-to-EBITDA ratio is calculated by dividing EV by EBITDA or earnings before interest, taxes, depreciation, and amortization. Typically, EV/EBITDA values below 10 are seen as healthy. However, the comparison of relative values among companies within the same industry is the best way for investors to determine companies with the healthiest EV/EBITDA within a specific sector.

Benefits of EV/EBITDA Analysis

Just like the P/E ratio (price-to-earnings), the lower the EV/EBITDA, the cheaper the valuation for a company. Although the P/E ratio is typically used as the go-to-valuation tool, there are benefits to using the P/E ratio along with the EV/EBITDA. For example, many investors look for companies that have both low valuations using P/E and EV/EBITDA and solid dividend growth."

Quoted from https://www.investopedia.com/ask/answers/072715/what-considered-healthy-evebitda.asp

Investopedia indicates there is a correlation between EV/EBITDA and PE Ratio. This is a good example of statical analysis leading to a new metric which we can start evaluating. There is an obvious correlation, and if I'm using PE I should include this in my analysis of individual equities.

Enterprise Value / Revenue (EV/R) to Operating Margin TTM

"The enterprise value-to-revenue multiple (EV/R) is a measure of the value of a stock that compares a company's enterprise value to its revenue. EV/R is one of several fundamental indicators that investors use to determine whether a stock is priced fairly. The EV/R multiple is also often used to determine a company's valuation in the case of a potential acquisition. It’s also called the enterprise value-to-sales multiple."

Quoted from Investopedia: https://www.investopedia.com/terms/e/ev-revenue-multiple.asp

"This value measures the percent of revenues remaining after paying all operating expenses. It is calculated as the trailing 12 months Operating Income divided by the trailing 12 months Total Revenue, multiplied by 100. Operating Income is defined as Total Revenue minus Total Operating Expenses."

Quoted from https://plexus.gcs-web.com/definition/operating-margin-ttm

Based on the descriptions above, it is interesting there is a correlation here, since operating margins can fluctuate and on a % basis wouldn't seem to be connected to revenue.